The Hurricane Katrina Insurance Claims

The insurance issues that arise in connection with mass torts have been studied with some care. These issues most often involve corporate claims for coverage under Commercial General Liability (“CGL”) insurance policies. The insurance issues that arise in connection with what might be called “mass disasters,” however, have received less attention. These are natural and man-made disasters whose center of gravity is not tort, and therefore not liability insurance, but personal and property losses. The mass disaster that occurred on 9/11 did spawn a variety of non-liability insurance disputes. But even these disputes mostly involved different forms of corporate insurance, such as commercial property and business interruption coverage claims.

The losses that arose out of Hurricane Katrina in August 2005, in contrast, heavily involve individual insurance issues. In particular, tens of thousands of homeowners whose residences were damaged or destroyed by the hurricane had standard homeowners insurance. These policies insure the risk of direct physical loss to the policyholder’s home and other property, subject of course to certain exclusions from and limitations on coverage. The key exclusion in this instance precludes coverage of loss resulting from “flood.” The typical policy also contains an anti-concurrent causation clause, which provides that excluded losses (such as those caused by flood) are not covered “regardless of any other cause or event contributing concurrently or in any sequence to the loss.” Claims made for Katrina-related losses under these seemingly simple policy provisions have spawned widespread litigation and controversy. This Essay briefly surveys these issues and comments on their implications for the availability of insurance coverage in the future.

Unequal Treatment of Religious Exercises Under RFRA: Explaining the Outliers in the HHS Mandate Cases

Ongoing conflict over the contraceptive mandate promulgated by the Department of Health and Human Services (“HHS”) has resulted in more than two dozen lawsuits by profit-making businesses and their owners seeking protection under the Religious Freedom Restoration Act (“RFRA”). To date, the businesses and their owners are winning handily, having obtained preliminary relief in seventeen of the cases, and being denied relief in only six. Last month, in fact, a panel of the D.C. Circuit Court of Appeals took the extraordinary step of reconsidering and reversing its own prior ruling and granting a preliminary injunction to a business seeking RFRA’s protection.

The analysis in these cases is turning largely on whether courts find that the HHS mandate imposes a “substantial burden” under RFRA. RFRA prohibits the government from imposing a “substantial burden” on a person’s religious exercise unless the government proves that imposing the burden is the least restrictive means of advancing a compelling government interest. To date, every court to find a substantial burden has entered a preliminary injunction. Thus, determining whether or not the mandate imposes a “substantial burden” is crucial to the outcome of these cases.

Why have six courts denied relief while most other judges have granted it? One part of the answer is that these courts have wrongly concluded that religious liberty rights disappear when an organization earns profits—an error I have discussed at length elsewhere.

This essay will explore a second error made by these outlier courts in applying RFRA’s “substantial burden” test. Properly understood, RFRA’s “substantial burden” analysis examines whether the government is coercing a believer to abandon a religious exercise (i.e., religiously-motivated conduct or abstention from conduct). Once sincerity of the religious motivation is established—an issue the government has not been contesting in the mandate cases—the underlying religious reasons for the religious exercise should be entirely irrelevant.

Good Intentions Matter

While writing the article to which Professors Mitchell and Bielby have published responses, I was mindful of the many ways in which the article could be misinterpreted. In taking issue with the assumption that legal controls work in a direct, linear manner to deter discrimination, I thought I might be misunderstood to say that people are not responsive to incentives. In worrying about how legal sanctions exert external pressure that may crowd out the inclination of well-intentioned people to self-monitor for bias, I feared that the article would be read mistakenly to oppose strong and appropriate legal rules against discrimination. In arguing that we should take people’s good intentions not to discriminate as a useful starting point for better workplace policies, rather than as the cynical exhibition of people’s self-delusion, I anticipated that the article would be dismissed as a fanciful and naïve denial of the existence of race and gender bias. In arguing that well-intentioned people can overcome their natural tendencies to discriminate, I was concerned about appearing to claim that good intentions are sufficient to end discrimination.

In the case of the responses by Professor Mitchell and Professor Bielby, these fears were unwarranted. The responses engage the article’s actual objectives—to clarify the state of empirical knowledge about unconscious workplace bias and to evaluate proposed approaches to reducing it. Professors Mitchell and Bielby, both leading figures in research about workplace bias, bring their considerable expertise to bear on evaluating and expanding the themes of the article. They each agree that legal scholars have ignored some of the relevant psychological literature and interpreted the research on which they have drawn in a shallow way. They also correctly identify my concerns about the overuse of legal coercion to reduce workplace bias, and concur that more legal controls are not likely be effective in reducing implicit bias.

Beyond these areas of agreement, there are differences in emphasis and enthusiasm.